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by Jennifer Hayes

Summit Management Ser-

vices Inc., an Akron, Ohio-

based housing management

and development firm that

owns and manages more

than 1,350 apartment units

in Colorado, paid $86 million

for the latest addition to its


Stonegate, a 350-unit gar-

den-style community on 24

acres at 11815 Ridge Parkway

in Broomfield, is Summit

Management Services’ first

purchase in the Broomfield/

U.S. 36 corridor, an area

where it has been pursuing

growing its holdings.

“Summit Management

owns assets in Fort Collins

and has been targeting that

Broomfield/U.S. 36 corridor

for awhile,” said Holliday

Fenoglio Fowler LP’s Jordan

Robbins. “They really like

that area.”

Robbins, along with HFF’s

Jeff Haag, represented the

out-of-state seller of the com-

munity, constructed in 2001.

“We had a ton of interest

in Stonegate,” Robbins said

of the community, which

offered a value-add play to

i nve s t o r s .

“The value-

add market

is still really

c o m p e t i -

tive. There

is a lot of

capital chas-

ing value-

add deals,

w h e t h e r



2000 product like this or

even older, ‘80s and ‘90s built

product. We’re seeing still a

pretty deep buyer pool on

the value-add side.”



Services plans to make

improvements to the exte-

rior and common areas of

Stonegate as well as make

interior upgrades.

Stonegate, which compris-

es 18 two- and three-story

buildings offering a mix of

one-, two- and three-bed-

room apartments, features

attached anddetachedgarag-

es. Additional unit amenities

include 9-foot ceilings, air

conditioning, ceiling fans,

garden tubs, gas fireplaces,

in-home washers and dryers,

private balconies, walk-in

closets and available storage.



include controlled access, a

resort-style swimming pool,

hot tub, grilling area, play-

ground, dog park, 24-hour

fitness center, resident lounge

with a full kitchen and fire-

place and “sweeping” views

of the Front Range.

Additionally, Stonegate

is located less than 3 miles

west of 36, near Flatiron

Crossing’s 2 million square

feet of retail options and

just west of Interlocken

Advanced Technology Envi-

ronment, which comprises

4 million sf of office space.

There are strong demo-

graphics and jobs, which

also were a draw for the

buyer, added Robbins.

At the time of the sale,

Stonegate was 95 percent


In addition to Summit

Management’s Colorado

holdings, the firm also owns

and operates a collection of

housing styles with more

than 3,000 apartments in

Ohio and North Carolina.

Stonegate apts. sell for $86 million


20 22 18 23

The 350-unit Stonegate community in Broomfield was purchased

by Summit Management Services Inc.

Magnetism Companies are looking to the Highway 36 corridor to attract and retain tech employees Unprecedented Downtown Colorado Springs sees an ‘unprecedented’ $600 million-plus in investment since 2013 Whale of a site Denver’s Bell Tower site poses challenges, opportunities Scarce ADenver investor acquires a rarity in Colorado resort towns – an affordable apartment community

APRIL 5-APRIL 18, 2017




companiesadvertise state-

ments suchas,“We treat


as if theywereourown.”

For this statement tobe true,proper-

tymanagersmust constantly focus

onmaintainingand increasing the

valueof the real estateasset they’re

responsible foroverseeing.Fora

propertymanager tobemost effec-

tive,and to truly treat theproperties

as if theywereherown,sheneeds

tohavea fundamentalunderstand-

ingof threekey real estate financial

concepts: cap rate, returnon cost

and leverage.

The firstandmost fundamental

concept is the capitalization rate,

commonly referred

toas cap rate.The

cap rate repre-

sents theannual

percentage return,

oryield,an inves-

torwill receive if


purchasedall cash.

It isdefinedas the


ating income to


example, ifProp-

ertyXwas recently

built, isproducing

a stabilizedNOIof

$500,000,andan investorpays $8.4

million topurchase it, then the cap

ratewouldbe $500,000dividedby

$8.4million,or 5.95percent.

The cap rate isa reflectionof the

risk inherent inacquiring thatpar-

ticularproperty –more riskmeansa

higher cap rate.Cap ratesvarybased

onproperty level risk factors such

as theage,occupancy, functional-

ity, location,creditworthinessof the

tenants,diversityof the rent rolland

lengthof tenant leases.

For example, ifaproperty isolder


maintenance items,an investor

will requireahigher returnonhis

investment.Assume thatProperty

Y is 20yearsold,hasanumberof

tenantswhoare struggling finan-

cially,andhasa significantamount

of tenant rollover in thenext 24

months.There ismore risk in this

investment,and therefore the cap

ratewillneed to take these factors

intoaccount. Ifan investor,after

taking into considerationall the risk

factors,decides shewill requirean 8

percentyield, thepurchaseprice can

be calculatedas theNOIof $500,000

dividedby 8percent,which is $6.25


Thedifference in cap rates

between these two examples reflects

thedifferent riskpremiumsasso-

ciatedwith each investment.The

propertywith less risk sold fora 5.95

percent cap rate,and theproperty

withmore risk sold foran 8percent

Young individualsarebeginning to seek out a career inpropertymanagement. Managementcareers PAGES14 Tips to achieve landscape irrigation effi- ciencies,which can savewater and dollars. Efficient irrigation PAGE20 Allmanagers should havewaterproofing services agreements for their properties. Vendor relations PAGE24


April 2017 All managers should understand these financial concepts


Vice president,

director of business



Property Services,


All propertymanagers should be comfortable calculating andusing cap rates, returns on cost and leverage equations. Featured Quarterly

Jordan Robbins

by Jill Jamieson-Nichols

Crescent Real Estate LLC

recapitalized $140.98 million

in assets in Flatiron Busi-

ness Park in Boulder and

added to its holdings there

for $22.21 million.



which brought in partners

Goldman Sachs and Lion-

stone Investments, includ-

ed 16 office and office/flex

buildings and a develop-

ment site that Crescent has

owned since 2011.

“The performance has been

very strong, and it’s just the

right time for the investor

partnership that we had that

originally bought it to exit

the transaction,” said Conrad

Suszynski, co-chief operating

officer. “We at Crescent felt

like there’s a lot more to do, so

we obviously wanted to stay

involved in Boulder and spe-

cifically Flatiron Park.”

The same day it completed

the recapitalization, Crescent

Real Estate acquired four

additional buildings in Flat-

iron Park from a Boulder fam-

ily that developed themmany

years ago. The deal brings

its holdings in the park to

approximately 859,000 square

feet. The company also owns

just under 900,000 sf of office,

flex and industrial assets at

the Campus at Longmont in

Boulder County.

The additions to the Flatiron

Park portfolio include 2300,

2400, 2450 and 5757 Central


The overall portfolio is

approximately 92 percent


HFF was the broker of

record for the transaction. John

Jugl, vice chairman of New-

mark Grubb Knight Frank’s

Western Region Capital Mar-

kets, also was involved in the


Flatiron assets recapitalized, expanded

Protecting identity

An industrial portfolio with

freestanding buildings that

give tenants their own iden-

tity sells for $26.4 million.

(See story on Page 4).


Multifamily 8 Office 10 Industrial 13 Retail 14 Rebchook RE Corner 19 Boulder County 20 Larimer & Weld Counties 21 Colorado Springs 22 Colorado 23 Finance 24 CDE 26 Who’s News 36